Is the classic car market finally cooling off?

In recent years, there has been a noticeable surge in the demand for classic cars (cars that are over 30 years old or a rare model for limited production) at auction but is the market starting to normalize and finally cool off after a post-COVID spike? 

Despite the record-breaking sale in August of 2023 of a 67 Ferrari 412P Berlinetta for a staggering $30.25 million, the overall results from the auctions during Monterey Car week and Pebble Beach show signs that the market is beginning to slow down.¹ 

Monterey Car Week auction sales dropped by 16% in 2023, and the average sale price experienced a 20% decrease from the previous year, dropping from $591,768 to $477,981. Likewise, the Pebble Beach auctions witnessed a decrease in sales by 15% in 2023.⁶

The decrease in sales is not the only indicator that the classic car market is changing, the sell-through rate, or percentage of cars that receive a bid at or above the minimum asking price, is also very important to note. At 68% during Monterey Car Week, the sell-through rate was lower than 2022’s 78%.² 

According to the Knight Frank Luxury Investment Index (KFLII), the performance of the overall classic car collectible market has dropped 7%, where other collectibles continue to grow in value and demand, such as Fine Art and Watches.³ 

One factor that is having an influence on the results of traditional car auctions is the rise in popularity of online auction sites, such as Bring a Trailer. The San Francisco based company was acquired by Hearst Autos in 2020 and has continued to grow over the past few years, specifically during the height of the COVID pandemic. Bring a Trailer sales in 2022 totaled over $1.35 Billion, a 63% increase over 2021.⁴ August was the most successful month in 2023, they reported a 76% sell-through rate, significantly higher than the live auction results.⁵ RM Sotheby’s has also recently launched two new digital platforms, one being Sotheby’s Motorsport, a collaborative effort with Motorsport Network. The online platform will focus on the sale of “21st century sport, exotic, and luxury vehicles priced between $100,000 and approximately $1 million”.⁸

With an uncertain economic future, it’s possible that collectors are wary of new purchases, and an overflow of product has led to the low sell through rate.

Sales for some models of collector cars are not experiencing the same decline as others. 

• Prewar vehicles continue to be performing very well at auctions. At the Gooding & Gooding auction in August, a 1914 Mercer sold for $760,000 over the original auction estimate.⁶
• The wrecked shell of a 1954 Ferrari 500 Mondial Spider sold for $1,875,000 through RM Sotheby’s.⁷ 
• According to HAGI’s Lamborghini index, year to date there has been a 9% increase in sales, with similar positive results from the BMX index as well.³

This downturn in the market and the rise of online auction sales, may present an opportunity for new collectors to enter the market and for experienced collectors to find some deals.